Allen v. Life Ass'n of America

• Decision Date: 18 November 1879
• Parties: WILLIAM H. ALLEN, Respondent, v. LIFE ASSOCIATION OF AMERICA, Appellant.
• Court: Missouri Court of Appeals

8 Mo.App. 52

WILLIAM H. ALLEN, Respondent,

v.LIFE ASSOCIATION OF AMERICA, Appellant.

St. Louis Court of Appeals, Missouri.

Nov. 18, 1879.

Where a charter provision of an insurance company giving the right to the assured to surrender his policy and receive therefor a certain consideration, is, in accordance with other provisions of the charter, abrogated, the assured, having taken his policy with notice that this change might be made, cannot complain that his contract has been changed against his consent.

APPEAL from the St. Louis Circuit Court.

Reversed and remanded.

IRWIN Z. SMITH, for the appellant, cited: Currie v. Assurance Soc., 4 Hen. & M. 315; Hyatt v. McMahon, 25 Barb. 457; Schrick v. Building Co., 34 Mo. 423.

BROADHEAD, SLAYBACK & HAEUSSLER, for the respondent, cited: Woodford v. Ashville, 6 Jones L. 558; Insurance Co. v. Rand, 24 N. H. 428; Insurance Co. v. Connor, 17 Pa. St. 136; Insurance Co. v. Butler, 34 Me. 451; Pulford v. Fire Department, 31 Mich. 458.

BAKEWELL, J., delivered the opinion of the court.

This action is upon a policy of insurance, dated April 29, 1870, on the life of William H. Allen, for the sum of $10,000, to be paid on June 6, 1916, or if the assured shall die before that date, to be paid to his wife or her legal representatives. The policy provides that if, after the payment of two or more annual premiums, the assured fails to pay further premiums, the policy becomes a paid-up policy for a sum equal to as many tenth parts of the sum insured as there shall have been annual premiums paid.

The petition alleges the payment of five annual premiums, amounting to $2,263.40, and that on failure to pay the sixth premium, due on April 29, 1875, the policy became a commuted policy for $5,000; that, by the terms of the charter in force when the policy was issued, the company was to do business only on the mutual plan, and each policy-holder was a member of the company, and it was provided that whenever any member, after payment of one or two premiums, shall surrender his policy, he shall receive, in consideration of his surrender, a sum equal to ninety per cent of the actual reserve of said policy, after deducting his indebtedness to the company. On April 20, 1878, plaintiff, according to the terms of his contract, offered to surrender his policy, and demanded from the company $1,626.20, being ninety per cent of the reserve of the policy, plaintiff not being then indebted to the company. Defendant refused to accept the surrender or to pay the sum demanded.

Defendant sets up in its answer that the above provision of its charter is not part of the contract; that the policy alone contains the whole contract; that the provision in question was a mere temporary privilege to such policy-holders as should choose to accept the provision whilst it remained in force; that the provision remained in force until September 30, 1872; that defendant is a mutual company, having no capital stock, and the provisions mentioned above as to surrendering the policy were created by the policy-holders, and subject to modification; that the policyholders did, whilst plaintiff held his policy, change them, and entirely abrogated them by a new charter, adopted by the members July 12, 1877, in accordance with the provisions of the law of the State. Defendant says that plaintiff did not demand the surrender value of his policy until the privilege was withdrawn, and that he has now no rights under his policy, unless he live until 1916.

A demurrer was interposed to this answer, as not being sufficient in law; the demurrer was sustained, and judgment was rendered for plaintiff.

The insurance law of this State in force at the time this policy was issued (Acts 1869, p. 31; Wag. Stats. 742, sect. 15), provides that any company organized for the purpose of making assurance upon lives may amend its charter. It is contended, however, that a mutual company has no right, without the consent of a corporator, to impose any new condition affecting the contract of insurance made by him with the company to his injury, as by any ex post facto by-law or otherwise.

It is, however, expressly ruled in Missouri, in Shrick v. St. Louis Mutual House-Building Company, 34 Mo. 423, that a corporation authorized by its charter to make such by-laws as may be necessary to attain its objects, may change such by-laws so as to affect the rights of the stockholders under the previous by-law. In that case, the plaintiff was a member of a building company; and, having paid his monthly instalments for five months, he then neglected to make further payments; and, according to the by-law in force when he became a member, he demanded of the company the amount actually paid by him. The by-law had in the meantime been repealed, and the court held that the right to demand repayment was therefore gone.

The principle of the case just cited seems to be decisive...